Banking giants are predicting catastrophic 3C of global warming – but that's good news for some

Unlike Donald Trump, the world of high finance takes climate change seriously and perhaps has a better understanding than scientists of how our efforts to tackle it will play out in the real world

Science is amazing. I feel I know this better than many because for some years I worked as a science correspondent. In one job, I used to go over to the news editor’s desk to brief him about the latest science stories and there were always many more than one person could do in a day, so it was a question of working out which ones to focus on. After a while, someone who sat nearby told me that they always enjoyed this part of the day because it was just so interesting.

But for all their intelligence, knowledge and dedication to uncovering the truth, scientists can’t seem to inspire the rest of us to tackle the greatest problem facing humanity: climate change. For a while, I interrogated different scientists in the hope of finding a clinching argument, something that would wake up the world to the pressing need to change.

However, I eventually concluded that, just like me, many scientists could not understand why, on being presented with clear and compelling evidence about a potentially catastrophic but solvable problem, people would choose not to solve it.

A firefighting helicopter flies overhead as a wildfire destroys homes in Camarillo, California, in November last year (Picture: David McNew) | Getty Images

Hard-left hippies not helping

They generally retain a sense of optimism, because they can see how humanity can stop global warming before it gets out of hand, but populists who dismiss climate change with a wave of their hand as ‘woke nonsense’ present a challenge that reason alone can struggle to overcome.

Such politicians like to portray climate change and the need to reach net-zero as a plot by hard-left hippies to destroy the economy and usher in a supposed socialist utopia. And, in this, they are aided and abetted by actual hard-left hippies who really do want to do this.

Fortunately, however, humanity has arbiters in this ‘debate’, impartial judges equipped with a sharp intellect and an understanding of how the real world – as opposed to the idealised, theoretical world of science or the bizarre, half-baked fantasies concocted by power-hungry populists – actually works: the hard-headed, clear-thinking captains of high finance.

When billions of pounds are at stake, it’s a good idea to understand what the future may hold. Hedge funds, major banks and insurance companies have little time for the ‘it’s a hoax’ schtick of Donald Trump and the like.

And while some scientists still cling to the forlorn hope that keeping climate change to within the target figure of 1.5C above pre-industrial times remains possible, the financiers are expecting a very much more frightening future for us all – a world in which global warming essentially doubles.

Return of the Pliocene

On Monday, Politico cited investment reports by Morgan Stanley, JPMorgan Chase and the Institute of International Finance that “all predict that the world will blaze past the warming threshold that the US and about 190 other nations had agreed to treat as their red line”. In one of those reports, analysts at Morgan Stanley wrote: “We now expect a 3C world... [following] recent setbacks to global decarbonisation efforts.”

So financiers are planning for a climate last seen on planet Earth about three million years ago in the Pliocene Era – long before modern human beings existed – within the lifetime of a child born today. In his award-winning book, Our Final Warning: Six Degrees of Climate Emergency, Mark Lynas describes what each degree of warming is expected to be like.

Here’s a taste from the 3C chapter: “Vast regions of South Asia are projected to experience heatwave episodes ‘considered extremely dangerous for most humans’ in a world that is just 2.25C warmer than pre-industrial times. A heatwave so extreme that it might currently be expected only four times a century will become not just a regular occurrence but take place every other year.”

He quotes a journalist writing about the 2019 heatwave in Delhi that saw temperatures of 48C: “Delhi is burning. You can’t imagine the heat. As you step out, it’s a furnace on your body.”

A business opportunity for some

No wonder then that air-conditioning, once considered a luxury in India, is becoming an everyday necessity. Returning to that Morgan Stanley report, their analysts suggest our path to a 3C world could see the growth rate of the world’s $235 billion air-con market more than double by 2030.

There are undoubtedly other economic opportunities created by our warming climate, just as there are in the transition to a net-zero carbon economy. However, there is only so much of the day that you can spend inside. If it’s not possible to work outdoors for any length of time – for example, in farmers’ fields or on construction sites – people will start to migrate in vast numbers to a climate that is not so hostile.

In some places, water will become an increasingly scarce and precious resource, prompting conflicts, perhaps even wars. Indeed, the Columbia River, which runs from Canada into the US and which Trump thinks can help solve California’s water-shortage problems, is already one source of the current tensions between Washington and Ottawa. “They want our resources. They want our water. They want our land. They want our country. Never,” Canadian Prime Minister Mark Carney told a recent rally.

The real philosopher’s stone

Science is amazing. It is responsible for a myriad of marvels: vaccines and antibiotics, the discovery of DNA, flight, the exploration of space, the theory of evolution, computers, the internet and a host of others.

Scientists have even managed to create gold out of bismuth, a feat echoing the efforts of 17th-century alchemists to find the “philosopher’s stone”. This was not only reputed to be able to turn base metal into gold but also to cure illnesses and prolong life.

To my mind, we have discovered the philosopher’s stone: it is science. There almost seems no limit to what it can do. In humanity’s reaction to climate change, however, it feels like we are collectively working up the courage to smash it and say 'to hell with the consequences'.